Templeton Investment Maxims
In 1983, a book entitled The Templeton
Touch, by William Proctor, outlined investment
maxims that summarize the
foundation of his investment philosophy.
Templetons 22 Principles For Successful
(1) There is only one long term investment
objective, maximum total after-tax return.
(2) Success requires study and work. It's harder
than you think.
(3) Outperforming the majority of investors
requires doing what they are not doing.
(4) Buy when pessimism is at its maximum, sell
when optimism is at its maximum.
(5) Therefore, buy what most investors are
(6) Buying when others have despaired, and
selling when they are full of hope, takes fortitude.
(7) Bear markets aren't forever. Prices usually
turn up a year before the business cycle hits bottom.
(8) Popularity is temporary. When a sector goes
out of fashion, it stays out for many years.
(9) In the long run, stock index prices
fluctuate around the EPS trend line.
(10) Stock index earnings fluctuate around
replacement book value for the stocks in the index.
(11) Buy what other people buy and you will
succeed or fail as other people do.
(12) Timing: buy when short term owners have
finished selling and sell when they've finished their buying, always opposing the fashion.
(13) Stock prices fluctuate more than values. So
stock indexes will never produce the best total return performance.
(14) Focus on value because most investors focus
on outlooks and trends.
(15) Invest worldwide.
(16) Stock price fluctuations are proportional
to the square root of the price.
(17) Sell when you find a much better bargain to
replace what you are selling.
(18) When your method becomes popular, switch to
an unpopular method.
(19) Stay flexible. No asset or method is
(20) Stock market investing takes more skill
than any other kind of investing.
(21) A person can outperform a committee.
(22) If you begin with prayer, you will think
more clearly and make fewer mistakes.
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